Author: Richard Lannon

Strategy Spotlight: 8 Tools & Techniques to Apply to Strategic Analysis & Planning

Written by Richard Lannon on May 10, 2016. Posted in Articles.

There are many definitions, tools, and techniques that can be applied to strategy analysis. If you do an internet search you will find all sorts of options available. The challenge is selecting the best approach, tools, and techniques to use given the business problem or opportunity.

Another part of the challenge is understanding what strategy analysis means since there can be many definitions. This can make it confusing. It is best to simply say that strategy analysis is an approach to facilitating, researching, analyzing, and mapping an organization’s abilities to achieve a future envisioned state based on present reality and often with consideration of the organization’s processes, technologies, business development and people capabilities. Part of that whole process is the ability to bridge gaps that exist between the strategic, tactical, and operational aspects of the organization. This requires a look at the present state, the future state, risk and financials and the creation of change requirements to achieve the desired outcomes.

Related Article: Strategy Spotlight: 8 Common Strategic Planning Mistakes You’re Making

Even though the definition of strategy analysis varies, there is common thinking on the key planning requirements.

Preparation for planning through the identification and review of information relevant for strategy analysis
Performing high-level environmental scan looking at the internal and external business environment with consideration for mission, vision, stakeholders, structure, existing plans, people profiles, and question responses.
Applying a choice of different tools and techniques to analyze the present state of a business environment and mapping out its future.

Some of the more common analysis tools and techniques include:

VMOST: This stands for Vision, Mission, Objectives, Strategy, and Tactical.

Success in an organization happens with top-down or bottom-up alignment. I was recently reminded of is when working with a client who stated that their tactical is not connected to the strategy. VMOST analysis is meant to help make that connection.

SWOT: The standard analysis tool, defined as Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses are internal to the organization, opportunities and threats are external. SWOT requires you to be candid and provide an honest assessment of the state of things. It forces you to create a dialogue with stakeholders to get different viewpoints. Eventually, you focus in on the key issues.

PEST: This is a great tool to use in tandem with SWOT. The acronym stands for Political, Economic, Social and Technology.

PEST reveals opportunities and threats better than SWOT, the direction of business change, projects that will fail beyond your control, and country, region and market issues through helping you create an objective view.

SOAR: This stands for Strengths, Opportunities, Aspirations, and Results. This is a great tool if you have a strategic plan completed, and you need to focus on a specific impact zone.

I used SOAR to help a business that needed to focus on their business development requirements due to an external market change. The organization needed to discuss how they would recapture lost sales by $1 million per month to ensure they maintained their profitably. Given that they had already done everything they could to cut costs and operate a lean business, the SOAR was critical in helping define the focus for the next 12 to 24 months.

Boston Matrix (product and service portfolio): This tool requires you to analyze your business product or service and determine if it is a cash cow, sick dog, questionable, or a flying star.

I have applied this tool to product and service reviews with to help make product decisions with consideration for market share and market growth. But it has no predictive value, does not consider the environment, and you need to be careful with your assumptions. It does force discussions on your present offering and whether it makes sense to maintain or enhance those offerings. For example, maybe you are holding onto a business product that you love but is really a sick dog and maybe there is a cash cow in your business that you are not optimizing. A decision has to be made.

Porter’s Five Forces: This tool helps you understand where your business power lies in terms of present competitiveness and future positioning strength. It forces you to analyze the bargaining power of suppliers and customers, the threats to new entrants and substitutes, and competitive rivalry in your marketplace. Using this tool helps you understand the balance of power and to identify areas of potential profitability. According to Porter, this model should be used at the line of business level.

Maturity Models: There are many maturity models that can be applied to a business. From the evolution model, the technology model, to the team model. The idea is that every business or department goes through a maturity cycle. The standard cycle is chaotic, reactive, proactive, service, and value. If you were looking at processes in a department, you would look to see where that process is on the continuum. Then you would determine where you need to be and what it would take to get to that point of maturity. This is a simple explanation. When using a maturity model, it is important that you have a clear problem definition and solution context.

Root Cause Analysis: This is important, as there are times in the strategy analysis process you need to dig deeper into a problem. This is where RCA is used. The key is that you need to identify and specify the problem correctly, analyze the root cause using a systematic approach, verify the causes, and determine the corrective actions. Implementation of the corrective action is extremely important.

There are many definitions, tools, and techniques that could be addressed. The ones mentioned here are only the tip of the iceberg for strategy analysis and become a foundational part of the strategy analysis toolkit. In a short blog, there is no way to mention them all. But you could create a tool checklist that you could use in your next planning and analysis engagement to help you and your team define the present, future, risk and change state that you need to succeed.

Until next time, be your best, invest in the success of others and make your journey count.

Richard

Check out Richard’s workshop at Project World * Business Analyst World Toronto on Thursday, May 12 – “Strategic Business Analysis – Techniques to Uncover and Define Business Need“

Strategy Spotlight: 8 Common Strategic Planning Mistakes You’re Making

Written by Richard Lannon on April 26, 2016. Posted in Articles. 1 Comment on Strategy Spotlight: 8 Common Strategic Planning Mistakes You’re Making

While waiting at a gate for the next available airplane at an airport, I met a fellow business traveler. We started talking about business and what we did for a living. He was a COO (Chief Operations Officer). So I asked about their planning process, what it means to be strategic and the common challenges he had witnessed. He opened up like a child that couldn’t wait to be heard. The conversation lead to eight common mistakes made in strategic planning.

1. Not knowing what it means to be strategic

Not everyone knows what it means to be strategic. To be strategic means you have to get clear on the future you want (future state), where you are at today (present state) and where you came from (past state). With that in mind, strategic planning looks to the future state and works its way backward to the present state.

2. Inappropriate use of the word strategic

Knowing the difference between a strategic and tactical discussion. Confusing things like marketing, people approaches, or technology with strategy. A value proposition, improved human resources, or technology integration is not strategy. These items are usually elements of a larger plan often requiring analysis and decisions by company representatives to determine solution options and to achieve the strategic results required.

3. Poor upfront preparation

We both agreed we see this one all the time. Someone says let’s do some strategic planning. They get a group of people together, go into a room, and use their preferred approach and develop a shopping list of tactical items that go nowhere. A poorly planned or guided planning (requirements) workshop was executed. Don’t make this mistake.

Strategic planning means you need a planned approach that is appropriate for your department or company. It is not one size fits all. I have a standard engagement approach, but it is adaptable relative to the client needs. Sometimes preparation could take up to 3 times the actual session time. This is especially the case in complex situations requiring a lot of preparation and communications.

4. Let’s look at last year’s plan

Looking at previous years’ plans at the wrong time can bring you down a rabbit hole where dialogue leads to nowhere. Mostly you end up re-hashing old items. There is an appropriate time to review previous year plans, but generally, it is not when you are embarking on future think.

Consider using the old plan as a historical document and a business artifact. Scrap what you did before and start again to discuss the future and then later bring in the now and old plans.

5. Not asking the right questions

Lots of people are not comfortable with asking questions, especially the right questions. Often the questions you ask are specific to the tool or technique you choose to use in your strategic planning process. There are natural questions that come out of a SWOT, PEST, SOAR, APAE, or from TTY (tomorrow, today, yesterday). The key is to focus your efforts on a specific area, use the best tool to address your concerns and develop a set of questions around that focus area.

6. Playing with your belly button

This is also known as navel-gazing. The mistake most often made is putting your attention on you. Dialogue needs to be focused away from the self-indulgent or excessive contemplation of oneself or a single issue, at the expense of a wider view. Things that are strategic can’t be mixed with tactical items. Items need to be categorized as strategic, tactical or operational.

7. Missing external world issues

By spending too much time on internal issues, you will miss the outside world impacts and opportunities.

Strategy means that your need to find ways to improve and move ahead no matter what is happening in the external business environment. We have all experienced good times and bad times. That is the natural course of the economy. You may have to change your business, try new things or potentially alter your business model entirely to achieve your strategic vision. This will come from having an outside-in view of your business.

8. Losing your imagination

This is the thinking by people that their product won’t change much because it is a bunch of plastic and metal. Therefore, there is not much they can do. If you hear this statement, you need to make some adjustments quick.

An option is to establish creative teams and have them answer the question, how could the whole market be served better in the future. Creative teams’ imagination generates scenarios and solutions for an organization whom product and thinking has matured. Strategic leaders leverage the creative minds and the imaginations of others to create options for tomorrow.

This was a great conversation to have. It was nice to get someone else’s perspective on the challenges in strategic planning. You just never know what you will discuss with a stranger at an airport. We both agreed that strategy is a long game – that it required overcoming some common mistakes.

Almost all business leaders tell me that their greatest asset is their people. If that is the case, with a little upfront work and guidance people can move their thinking from tactical to strategic and beyond the present state.
Invest in the success of others and make your journey count.

Richard

Strategy Spotlight: 4 Parts Of The Strategic Analysis Process

Written by Richard Lannon on April 12, 2016. Posted in Articles. 1 Comment on Strategy Spotlight: 4 Parts Of The Strategic Analysis Process

Some time ago I wrote a blog about the five terms in the planning process that every business leader and professional should know. It was part of filling in the strategic blank and getting to know the strategic planning process. With the word strategic, and by adding the word analysis, planning, leadership, management and implementation you get the perfect adjective-adverb combination. The terms are defined in my other article (5 Terms in the Planning Process).

That got me thinking about taking a deep dive into each term separately to see what can be revealed. In this feature I will tackle strategic analysis. I suspect it might be a book in and of itself.

I defined strategic analysis as having a simple definition. It is the process of developing strategy for a business by researching the business and the environment in which it operates. Often it requires the knowledge and use of various tools to prepare business strategies by evaluating the opportunities and challenges faced by the company as it moves forward. It takes into consideration internal and external factors that would be impacting the organization.

The key part of strategic analysis is having a good tool belt and know how and when to use the tools. This can be the role of the business analyst.

Often strategic analysis has four fundamental parts: present state, future state, risk, and transitional analysis.

Present State Analysis

Also referred to as current state analysis and is part of situational analysis. Present state analysis is used to understand the internal and external current affairs of a business.

Often when doing a present state you use a combination of high-level environmental scan and tools to dig deeper into your initial assessment. An environmental scan could include:

A review of current mission, vision, values, and guiding principles, stakeholder analysis to understand key relationships
A review existing organizational structure and mandate
A review of past strategic plans, reports, and other relevant materials, interviews with key stakeholders
A review of pre-analysis questionnaires
Profiling people and their impact
Preparing for planning sessions
A SWOT, PEST or SOAR analysis

or using other tools or techniques that are more appropriate. This is all done to grasp an understanding on the NOW of the business and becomes the benchmark for future comparison.

Future State Analysis

It is great to get the current state but even more fun to create a future state situation taking into consideration all the factored revealed in your present state analysis.

Future state comes from your discussion with team members from imagining the vision of success and future of the organization, the key strategic agenda items, the strategic initiatives that will help you achieve the desired future state and the work elements that will get you to where you need to go.

Future state is often forged through dialogue and decisions made about key business impact zones and the solutions needed to leverage opportunity and solve challenges. Often you need to ensure your goals and objectives are set that will satisfy the business needs.

Future state analysis helps create a bridge from the existing situation to the future situations with consideration for strategic, tactical and operational commitments and reality.

Risk Analysis

In risk analysis, I have always likened it to predict the outcome of a game and whether you are dealing with positive risk (opportunity) or negative risk (challenge). There are always the known-known, the known-unknown and the unknown-unknown (look it up). Either way, you need to understand the levels of risks and what is acceptable. Every organization has its own risk culture that will need to be satisfied.

During your initial analysis, risk should have been identified in your initial situational analysis with consideration for economic factors, market factors, competition, technology, suppliers, process, labour markets and business rules to name a few. If you are going from a present situation to a future state of change and transition, then the gap would need to be analyzed to understand the uncertainties around the change and the actions to take to overcome the risk. Always fun.

Transitional Analysis

Also referred to as change analysis, this is where the rubber meets the road. A full gap analysis would be performed to ensure that the recommended solutions can be done and what needs to happen to make sure the change can be implemented. I consider transition, change, and implementation analysis all part of the transformation requirements process.

Things to consider are the context of the change, alternatives, justification, investment, resources, solution value, stakeholder reviews, and decision points and the business state on the road ahead.

In transitional analysis, key business artifacts would be used or created that could include a strategy map and/or a roadmap, work-plans and communication plans. The key is to go the distance.

Strategic analysis is a great adjective/adverb combination. It is the umbrella of a powerhouse of professional work requirements, approaches, and tools and techniques that must be completed to fully understand the business problem or opportunity, the potential solutions, the implementation requirements and the measurements of success from the present state to a new future state. Strategic analysis is an important overarching part and component of the strategic process. All good plans and change start with great strategic analysis and a little imagination (just needed to throw that in).

Strategy Spotlight: Breaking Down 4 Process Levels in Your Organization

Written by Richard Lannon on December 15, 2015. Posted in Articles. 1 Comment on Strategy Spotlight: Breaking Down 4 Process Levels in Your Organization

Everything that happens in your organization and cuts across the levels of organization can be divided into ‘big buckets’ of things that the business does.

Chances are, you have some people in charge of those buckets. Often we see human resources, financial, information technology, and manufacturing processes being part of the list. But what if your organization has other things going on? You might have a whole research and development department that has processes that cut across the organization. If you missed these in the high-level identification of business processes, you might create a negative impact for the company by not representing all the true processes that exist.

There is an impact to understanding that all organizations can be broken down into at least a four-level process model like the maturity model discussed in an earlier blog (5 Business Processes to Your Evolutionary Success). However, there are other process level models that look at the business slightly differently.

Tari Kaupapa from the project office of Massey University outlined a Four Level Process in his paper on “Process Mapping; Process & Guide.” He used the following guidelines to understand and identify the different processes in the business organization:

Level One: is the standard high level and lists the operational levels of an organization.
Level Two: depicts the end-to-end processes across the operational areas.
Level Three: shows the roles and associated steps required to complete a specific process within an operational area.
Level Four: is the documentation of instructions and procedures required to complete steps in the level three processes.

Within this model, everything must link and connect. Failing to do so could have bottom line impacts, due to cost changes and productivity mishaps. It’s also important to know exactly which level of the organization we are dealing with and when. The candid discussion happens when you review your business process maturity levels at the same time as determining what process level from Kaupapa’s model you are at. The best bet is to pick your processes and then figure out with your team what process levels you’re at, which buckets they belong in, how they link together and where improvements need to be made.

Level 2 and 3 are the tactical levels in this model. You’ll need this level information, both for strategic conversation and also to bridge the gap between the strategic and the operational. Whatever happens, level 2 and 3 in your business should be categorized and be part of the level one items–those big buckets that have an impact on the entire organization.

Level 4 thinking is in the weeds and is not for the business leader. Still, it is often customer-facing and is, therefore, important for you to know and understand, especially around how it impacts to your business. Awareness is what is important here.

Every process in your business belongs somewhere. Whether it is about finding Kaizen opportunities (7 Wastes in Your Business), applying a business maturity model (5 Business Processes to Your Evolutionary Success) or evaluating your process levels. Often it comes down to how efficient and effective your business is within the common constraints of time, money and resources, and the need to cut costs while improving productivity.

Strategy Spotlight: 9 Steps to Take You From Strategic Plan to Implementation

Written by Richard Lannon on October 26, 2015. Posted in Articles. 2 Comments on Strategy Spotlight: 9 Steps to Take You From Strategic Plan to Implementation

Creating an Execution/Implementation Culture is all about getting things done through people. To do that, you need to get your senior team on the same page in their thinking about management vs. leadership and how it relates to empowering people to get things done.

One of the ways to do this is to work through the process from strategic planning to tactical implementation. As part of your planning process, consider these nine key items to get your senior management team rowing in the same direction.

1. Define Strategy

If you have strategic items that the senior team must deliver, review them. Get them down to 3 to 5 strategic agenda items and into words that can be remembered by you and your people.

2. Set Initiatives

Start the process of defining your key initiatives that relate to the strategic agenda items. Depending on the size of the organization, these may be referred to as enterprise or program items. No matter which term you use, create strategic initiatives that serve as umbrellas for actual project work.

3. Establish Elements

Establish the big chunks of work that must be done. Work statements should always start with a verb and be action-charged. These are the key elements and are referred to as statements of work. They are not tasks. You should only have 3 to 5 key elements at the end of this step.

4. Create Measurable Outcomes

To create measurable outcomes, use the SMART (specific, measurable, attainable, realistic, time-bound) or CAR (challenge, action, result expected) models. When writing measurable outcome statements, make sure they are no more than three sentences. The longer and more detailed the information the greater chance you will lose your key stakeholders.

5. Enable Champions

Every initiative should have a champion. Champions are leaders who use vision and influence to get things done through people. A Champion is not the same as being a manager. Managers are operational and get things done through authority. It is important that Champion be empowered to work across the organization and functional lines to lead and support the strategic initiatives, required outcomes and work elements to ensure success.

6. Agree on Timelines

All initiatives should have timelines. There should be an overall timeline for each strategic initiative and separate timelines for work elements. Discuss and agree upon timelines. Not everything has to happen at once.

7. Assign Leaders

Work gets done by leveraging resources. In this case, the resources are defined as people. At this level, the Initiative Champion seeks Project Leaders within the functional business areas to rise and take responsibility for organizing people to get the chunks of work completed. The project leaders must break down the chunks of work, gathering additional resources and creating micro-timelines to meet key milestones.

8. Forecast Costs

The Initiative Champions working with Operational Managers and Project Leaders should work together to define the true costs associated with the strategic initiatives and the associated work. Some initiatives will be operational, and others will be clear projects.

9. Establish Alignment

There should always be an alignment stream associated with your strategic initiatives. The alignment stream should include objectives for creating a common language for communications, establishing awareness and activation abilities, and building collaboration skills.

Not everything happens at once. The senior team will make mistakes. They may become overwhelmed with what needs to be done. Maybe timelines aren’t fully discussed and agreed upon. An execution culture is cross-functional and self-directed. It’s not a clear-cut process. People need a path to follow. As the senior team, give them one.

Question: In what way are you engaging others in your strategic and tactical planning efforts to ensure you achieve successful implementation?